The Credit Union National Association (CUNA) appreciates the opportunity to comment on the proposed rules regarding
the operation of financial institutions on Department of Defense (DoD) installations, which were published in the
Federal Register on August 11, 1999. CUNA represents more than 90 percent of our nation's 11,000 state and federal
credit unions. As with all issues affecting defense credit unions, CUNA has worked closely with the Defense Credit
Union Council (DCUC) on the issues raised in this comment letter.

This letter focuses on two issues, the proposed cap on fees and services to an amount not to exceed 110% of the
industry-wide averages for banks and the proposed ban on surcharging for ATM services provided on DoD installations.
Regarding the other changes contained in the proposed rules, CUNA fully supports the position described in DCUCs
comment letter of October 12, 1999.

Capping Fees for Services to an Amount not to Exceed 110% of the Industry-wide Averages for Banks

Research conducted by DCUC indicates that most defense credit unions do not support the fee cap, which they feel is
unnecessary and will interfere with their pricing decisions.

The DoD Financial Services Survey, published in February 1998, indicates that a large majority of domestic military
and civilian employees are satisfied with their on post financial institutions and with the cost of services at these
institutions. Also, a General Accounting Office Report entitled, Military Banking (Solicitations, Fee, and Revenue
Potential),-- dated April 1999, concluded that fees charged are similar both on and off bases-- and the fees were not
found to be unreasonable or out of line.

We are concerned that the fee cap may result in unintended consequences for some defense credit union members. A
credit union may impose charges for repeated returns associated with non-sufficient funds (NSF) in their share draft
accounts. The fee cap could limit such fees, which are designed to serve as a disincentive for returned items. As a
result of the fee cap, a defense credit union may feel compelled to impose other fees on other accounts in an effort to
recoup costs associated with NSF items. Thus, members who use accounts responsibly could face higher fees, while
members with repeated returns could experience lower NSF fees.

Prohibition on Surcharging for ATM Services

DCUCs research also indicates that about two-thirds of defense credit unions do not impose ATM surcharges. Some of
these credit unions do not support a rule to ban these surcharges while others believe that credit union members should
not be forced to pay surcharges by virtue of their military assignments.

For those defense credit unions that charge a fee, these fees are intended to recoup the costs of providing the
service. Also, due to low usage, some ATMs on post may not be financially feasible without surcharges. If surcharges
are banned, some defense credit unions believe that they may have no alternative other than to remove ATMs, which may
be inconvenient for military personnel.

Rather than impose a ban on surcharges which is not supported by all defense credit unions, we encourage DoD to
study this issue further and to discuss with defense credit unions whether alternative arrangements could be developed,
such as additional logistical support from DoD for such operations.

Thank you for the opportunity to comment on the proposed rules regarding the operation of financial institutions on
DoD installations. If DoD staff have questions about our comments, please give me or Jeff Bloch, Assistant General
Counsel, a call at 202-682-4200.